Baron Funds, an investment management company, released its “Baron Discovery Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. In the fourth quarter, the fund appreciated 6.20% (Institutional Shares), outperforming the 4.50% return for the Russell 2000 Growth Index. For the year ended December 31, 2024, the fund returned 16.28% compared to the index’s 15.15% return. Given the challenging start in the first half of the year, the fund was pleased with the outperformance of the fund in 2024. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron Discovery Fund highlighted stocks like Floor & Decor Holdings, Inc. (NYSE:FND), in the fourth quarter 2024 investor letter. Floor & Decor Holdings, Inc. (NYSE:FND) is a multi-channel specialty retailer of hard surface flooring and related accessories. The one-month return of Floor & Decor Holdings, Inc. (NYSE:FND) was -0.34%, and its shares lost 6.62% of their value over the last 52 weeks. On January 22, 2024, Floor & Decor Holdings, Inc. (NYSE:FND) stock closed at $100.73 per share with a market capitalization of $10.8 billion.
Baron Discovery Fund stated the following regarding Floor & Decor Holdings, Inc. (NYSE:FND) in its Q4 2024 investor letter:
“Floor & Decor Holdings, Inc. (NYSE:FND) is a hard-surface flooring retailer with a long growth runway driven by double-digit unit growth as they consolidate the hard-surface flooring industry. The company has long-term, sustainable competitive advantages in its ability to source and price products versus both big box retailers and independents. Despite this positive long-term secular potential, the company’s shares can be highly sensitive to changes in interest rates over the short term as higher interest rates increase the risk of a prolonged housing recovery. As the year ended, rates on longer-dated maturities increased and, as a result, shares underperformed during the quarter due mostly to changes in interest rates. Despite this dynamic, demand for the company’s products appears to have stabilized and we believe once the housing market begins to recover, Floor & Decor will continue to be well positioned.”
An overhead view of a website displaying the multiple options of flooring products available for purchase.
Floor & Decor Holdings, Inc. (NYSE:FND) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held Floor & Decor Holdings, Inc. (NYSE:FND) at the end of the third quarter which was 34 in the previous quarter. While we acknowledge the potential of Floor & Decor Holdings, Inc. (NYSE:FND) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Floor & Decor Holdings, Inc. (NYSE:FND) and shared the list of stocks that Jim Cramer recently discussed. Montaka Global Investments established a position Floor & Decor Holdings, Inc. (NYSE:FND) in the previous quarter. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.